The undepreciated capital cost balances at January1, 2023 were as follows: - Class 13 $37,500Improvements on its leased head office premises whichwere rented in 2021 for four years with two successiveoptions to renew for five years and five years.Improvements had originally been made in 2021 in theamount of $45, 000. Additional improvements weremade in 2023 at a cost of $28,000. 2021:45000 / (4+5) : = 5000 2023: 28000 / (2+5) = 4000 x1.5 = 6000 You multiply by x 1.5 in 2023 because it is anet addition. What does that mean? Explain clearly.

Undepreciated Capital Cost Balances:This refers to the total cost of an asset (such as improvements…

Answered: 1.5 = 6000 You multiply by x 1.5 in…

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1.5 = 6000 You multiply by x 1.5 in 2023 because it is a net addition. What does that mean? Explain clearly.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

The undepreciated capital cost balances at January
1, 2023 were as follows: - Class 13 $37,500
Improvements on its leased head office premises which
were rented in 2021 for four years with two successive
options to renew for five years and five years.
Improvements had originally been made in 2021 in the
amount of $45, 000. Additional improvements were
made in 2023 at a cost of $28,000. 2021:
45000 / (4+5) : = 5000 2023: 28000 / (2+5) = 4000 x
1.5 = 6000 You multiply by x 1.5 in 2023 because it is a
net addition. What does that mean? Explain clearly.

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